Tuesday, August 26, 2014

Global Military Spending

There are several ways to consider and compare global military spending. The most obvious way is to calculate total military spending and convert to US Dollars. Another important measure is to consider the level of spending as a percentage of a country's GDP. We start with the second way first. (See the end of the post for a definition of military spending)

While the United States has the world's largest military by far it ranks only 13th on the level of spending as a percentage of GDP. Importantly SIPRI doesn't construct figures for North Korea. Estimates for North Korea range from 20-33 per cent of GDP.

Rank

Country

2013

1

Oman

11.48

2

Saudi Arabia

8.99

3

Afghanistan

6.24

4

Israel

5.63

5

Angola

5.01

6

Algeria

4.95

7

Azerbaijan

4.68

8

Lebanon

4.36

9

Russian Federation

4.19

10

Armenia

4.10

11

Yemen, Rep.

3.93

12

Morocco

3.90

13

United States

3.81

14

Bahrain

3.77

15

Jordan

3.56

16

Mauritania

3.56

17

Iraq

3.54

18

Colombia

3.44

19

Pakistan

3.39

20

Singapore

3.27

21

Kyrgyz Republic

3.24

22

Namibia

3.15

23

Ecuador

3.11

24

Swaziland

2.96

25

Ukraine

2.93

26

Zimbabwe

2.78

27

Georgia

2.74

28

Sri Lanka

2.71

29

Korea, Rep.

2.60

30

Brunei Darussalam

2.56

31

Greece

2.46

32

India

2.45

33

Turkey

2.33

34

United Kingdom

2.30

35

France

2.24

36

Burundi

2.24

37

Vietnam

2.18

38

Portugal

2.17

39

Serbia

2.17

40

Uganda

2.16

41

Lesotho

2.15

42

China

2.05

43

Botswana

2.02

44

Tunisia

2.01

45

Chile

1.96

46

Estonia

1.96

47

Kenya

1.95

48

Uruguay

1.87

49

Timor-Leste

1.81

50

Poland

1.79

51

Zambia

1.69

52

Egypt, Arab Rep.

1.67

53

Croatia

1.66

54

Australia

1.63

55

Cambodia

1.60

56

Paraguay

1.60

57

Bulgaria

1.58

58

Italy

1.58

59

Montenegro

1.57

60

Malaysia

1.55

61

Thailand

1.52

62

Bolivia

1.45

63

Nepal

1.43

64

Peru

1.42

65

Norway

1.41

66

Burkina Faso

1.41

67

Mali

1.41

68

Brazil

1.40

69

Congo, Dem. Rep.

1.40

70

Denmark

1.38

71

Bangladesh

1.37

72

Malawi

1.36

73

Belarus

1.35

74

Fiji

1.34

75

Germany

1.34

76

Cameroon

1.34

77

Romania

1.33

78

Gabon

1.32

79

Albania

1.30

80

Netherlands

1.29

81

Philippines

1.28

82

Finland

1.27

83

Kazakhstan

1.25

84

Honduras

1.24

85

Macedonia, FYR

1.24

86

Venezuela, RB

1.21

87

South Africa

1.17

88

Sweden

1.17

89

Tanzania

1.15

90

Bosnia and Herzegovina

1.13

91

Rwanda

1.11

92

El Salvador

1.10

93

Czech Republic

1.08

94

Guyana

1.07

95

Belize

1.04

96

Belgium

1.04

97

Benin

1.04

98

Seychelles

1.03

99

Canada

1.01

100

New Zealand

1.00

101

Japan

0.99

102

Spain

0.94

103

Indonesia

0.90

104

Jamaica

0.85

105

Ethiopia

0.82

106

Switzerland

0.78

107

Austria

0.78

108

Nicaragua

0.76

109

Liberia

0.75

110

Argentina

0.74

111

Mexico

0.62

112

Dominican Republic

0.61

113

Papua New Guinea

0.57

114

Ireland

0.55

115

Ghana

0.53

116

Madagascar

0.51

117

Luxembourg

0.51

118

Cabo Verde

0.50

119

Guatemala

0.48

120

Nigeria

0.47

US military spending has declined over recent years, whilst China's has increased. Since 2004 Chinese military spending has increased by 170 per cent, whilst its GDP Has increased by 140 per cent. Still China only spends 2.05 per cent of its GDP while the US spends 3.81 per cent. Japan, due to its pacifist constitution still spends just under 1 per cent.

The table below constructed from SIPRI databases shows basic measure alluded to above of total military spending converted to US Dollars. It shows the top 60 military spenders in the world (New Zealand comes in at 60).

Figures are in US$m. at 2013 prices and exchange rates.

Rank

Country

2013

1

USA

640221

2

China, P. R.

188460

3

Russia

87836

4

Saudi Arabia

66996

5

France

61228

6

UK

57891

7

Germany

48790

8

Japan

48604

9

India

47398

10

Korea, South

33937

11

Italy

32657

12

Brazil

31456

13

Australia

23963

14

Turkey

19085

15

Canada

18460

16

Israel

16032

17

Colombia

13003

18

Spain

12765

19

Taiwan

10530

20

Algeria

10402

21

Netherlands

10328

22

Singapore

9759

23

Poland

9257

24

Oman

9246

25

Iraq

7896

26

Indonesia

7840

27

Mexico

7838

28

Pakistan

7641

29

Norway

7235

30

Sweden

6519

31

Angola

6095

32

Greece

5939

33

Thailand

5891

34

Kuwait

5815

35

Chile

5435

36

Ukraine

5338

37

Venezuela

5313

38

Belgium

5264

39

Switzerland

5053

40

Malaysia

4842

41

Portugal

4784

42

Denmark

4553

43

Argentina

4511

44

Egypt

4255

45

South Africa

4108

46

Morocco

4064

47

Philippines

3472

48

Azerbaijan

3440

49

Viet Nam

3387

50

Finland

3262

51

Austria

3230

52

Peru

2865

53

Ecuador

2803

54

Kazakhstan

2799

55

Romania

2521

56

Nigeria

2411

57

Myanmar

2211

58

Czech Rep.

2149

59

Lebanon

1936

60

New Zealand

1833

In terms of total military spending the US still dominates with 37 per cent of the total compared to China's 11 per cent. This means that China's spending is about 30 per cent of the US figure.

Note that these figures are measured in US dollars meaning they are subject to the same problems of measurement outlined in How Big, How Rich, How Developed. Constructed on a PPP basis, Chinese military expenditure would be more substantial as a percentage of the total.

The table from the PDA (Project on Defense Alternatives) below shows different measures for military spending from SIPRI and IISS (International Institute for Strategic Studies).

What this table makes clear is that how we measure military expenditure matters for our perceptions about China's rise and US relative decline. However, it also seems reasonably clear that the US retains an overwhelming military dominance regardless of the measure.

Australia, despite significant declines in spending as a percentage of GDP ranks as the 13th largest military spender.

Given the Abbott government's focus on the seriousness of the Islamic terrorist challenge and promises made, it seems clear that military spending will rise in coming years as will expenditure on domestic policing and surveillance.

Military expenditures data from SIPRI are derived from the NATO definition, which includes all current and capital expenditures on the armed forces, including peacekeeping forces; defense ministries and other government agencies engaged in defense projects; paramilitary forces, if these are judged to be trained and equipped for military operations; and military space activities. Such expenditures include military and civil personnel, including retirement pensions of military personnel and social services for personnel; operation and maintenance; procurement; military research and development; and military aid (in the military expenditures of the donor country). Excluded are civil defense and current expenditures for previous military activities, such as for veterans' benefits, demobilization, conversion, and destruction of weapons. This definition cannot be applied for all countries, however, since that would require much more detailed information than is available about what is included in military budgets and off-budget military expenditure items. (For example, military budgets might or might not cover civil defense, reserves and auxiliary forces, police and paramilitary forces, dual-purpose forces such as military and civilian police, military grants in kind, pensions for military personnel, and social security contributions paid by one part of government to another.)

Stockholm International Peace Research Institute (SIPRI), Yearbook: Armaments, Disarmament and International Security.